NEWS RELEASE


    Date:    Oct. 21, 1998


    Contact: Katherine Taylor
             Investor Relations Manager
             815-961-7164
                                                               AMCORE
                                                               FINANCIAL, INC.


             AMCORE FINANCIAL, INC. REPORTS THIRD QUARTER EARNINGS
                        NET INCOME INCREASES 20 PERCENT

    ROCKFORD -- AMCORE Financial, Inc., a $4 billion regional financial services
company, reported a 20 percent increase in net income to $10.9 million for the
third quarter ending September 30, 1998 when compared to same period a year ago.

    "We're pleased with our performance," said Robert J. Meuleman, president and
chief executive officer.  "Our core businesses are strong, our asset quality has
improved and our margins have held up well."


    HIGHLIGHTS
    ----------
    -     Diluted earnings per share rose to $0.37, a 12 percent increase from
the same period last year.

    -     Net interest income increased 12 percent, including a one basis point
increase in the core margin compared to the same period last year.

    -     Average loans for the third quarter were up 21 percent from same
period last year due to strong market growth and the results of our sales
management process.

    -     Non-performing loans represented 0.83 percent of total loans, a
decrease of 18 basis points from the same period last year. Asset quality
remains strong with annualized net charge-offs representing 15 basis points of
average loans.

    -     Trust and asset management fees rose 63 percent or $2.4 million
resulting from revenue contributions from the acquisition of Investors
Management Group (IMG), Des Moines, Iowa, and strong sales results.




                                                                       Page 1
AMCORE Financial, Inc.
501 Seventh Street, Post Office Box 1537, Rockford, Illinois 61110-0037
Telephone 815 968-2241

<PAGE>

    EARNINGS FROM OPERATIONS
    ------------------------
    Net income for the third quarter was $10.9 million, a 20 percent increase
from $9.0 million in the third quarter of 1997. On a year-to-date basis, net
income from operations was $31.5 million, an increase of 22 percent from the
same period in 1997. Earnings per share on a diluted basis were $0.37, an
increase of 12 percent from $0.33 in the third quarter of 1997. On a
year-to-date basis, earnings per share on a diluted basis were $0.98, up 38
percent from $0.71 a year ago.

    "Our earnings were solid in light of a challenging quarter characterized by
volatility in the markets, an inverted yield curve, and low interest rates,
which triggered another round of refinancing," said Meuleman. "We want to remind
our stakeholders that we are a regional financial services company with our
assets and liabilities concentrated in the Midwest and not in foreign
locations."

    Continued growth in earning assets resulted in a 12 percent or $3.5 million
increase in net interest income on a fully taxable equivalent basis. Average
earning assets increased 12 percent in the third quarter 1998 when compared to
the third quarter 1997. Almost all of the growth is attributed to a $ 394
million or 21 percent increase in average loans. The core interest margin,
excluding the investment leveraging program, was 4.18 percent for the third
quarter 1998 compared to 4.17 percent in the third quarter of 1997. Reported
margins, however, remained flat at 3.52 percent when compared to the third
quarter 1997.

    Mortgage revenues were $2.2 million compared to $1.8 million in the same
quarter last year. The increase is due to a 96% increase in mortgage
originations resulting from favorable interest rates and the expansion of
mortgage activities into Wisconsin. Loan originations were a record $105 million
in the third quarter 1998 compared to $53.3 million in the third quarter of
1997. "Mortgage revenues would have been higher except for prepayments that
impaired the value of the mortgage servicing rights and necessitated a
write-down of $500,000," said Meuleman. "Of the quarterly originations, 65
percent was due to refinancing."

    Trust and asset management revenues increased 63 percent to $6.3 million in
the third quarter of 1998 compared to $3.9 million in the third quarter of 1997.
More than half of the increase was due to the acquisition of IMG in February,
which also brought mutual fund administration revenues in-house.

    Total operating expenses for the third quarter of 1998 increased 17.7
percent to $28.7 million when compared to the third quarter of 1997. Most of the
increase in non-interest expense is due to the acquisitions and increased
mortgage activity. The efficiency ratio was 59.47 percent compared to 58.59
percent in the third quarter of 1997.



                                                                       Page 2
<PAGE>

    ASSET QUALITY AND RESERVES
    --------------------------
    The allowance for loan losses to total loans was 1.11 percent at September
30, 1998, compared to 1.12 percent at September 30, 1997. The allowance for loan
losses to non-performing loans increased to 135 percent from 111 percent at
September 30, 1997. Total non-performing assets at September 30, 1998 were $21.0
million, or .52 percent of total assets.

    Net charge-offs represented 15 basis points of average loans during the
third quarter 1998 compared to 30 basis points in the third quarter 1997. This
reflects the lower risk profile of the loan portfolio after the sale of the
satellite dish receivables in January.

    AMCORE Financial, Inc., headquartered in northern Illinois, is a financial
services company with banking assets of over $4 billion and 11 banks operating
in 68 locations in Illinois and Wisconsin. The company also has four financial
services companies: AMCORE Investment Group, which provides trust and brokerage
services, and through its wholly owned subsidiary, Investors Management Group,
provides capital management, mutual fund administrative services, and is the
investment advisor for the Vintage family of mutual funds; AMCORE Mortgage,
Inc.; AMCORE Consumer Finance Company, Inc. and AMCORE Insurance Group, Inc.

    This news release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 with respect to the
results of operations and businesses of AMCORE. These forward-looking statements
involve certain risks and uncertainties. Factors that may cause actual results
to differ materially from those contemplated, projected, forecasted or estimated
in such forward-looking statements include, among others, the following
possibilities: (i) heightened competition, including the intensification of
price competition, the entry of new competitors and the formation of new
products by new and existing competitors; (ii) adverse state and federal
legislation and regulation; (iii) failure to obtain new customers or retain
existing customers; (iv) inability to carry out marketing and/or expansion
plans; (v) loss of key executives; (vi) changes in interest rates, including the
related effect of prepayments; (vii) general economic and business conditions
which are less favorable than expected; (viii) unanticipated changes in industry
trends; (ix) changes in Federal Reserve Board Monetary policies, (x) inability
to realize cost savings anticipated with mergers or data processing outsourcing
or higher than expected costs or other difficulties associated with these
activities.

    AMCORE common stock is listed on The NASDAQ Stock Market under the symbol
"AMFI." Further information about AMCORE Financial Inc. can be found at our
newly redesigned website at http://www.AMCORE.com.

                                                                       Page 3
<PAGE>
                             AMCORE Financial, Inc.
                    CONSOLIDATED KEY FINANCIAL DATA SUMMARY

NOTE:   All prior year amounts have been restated to reflect the mergers with
        First National Bancorp, Inc. on April 18, 1997 and Country Bank Shares
        Corporation on July 16, 1997, and the three-for-two stock split
        effective September 17, 1997.  These mergers were accounted for under
        the pooling of interests method.  AMCORE Financial, Inc. (AFI)
        acquired Investors Management Group, Ltd. on February 17, 1998. AFI
        merged with Midwest Federal Financial Corp. on March 27, 1998.  This
        transaction was accounted for as a pooling of interests, however, the
        size of the transaction does not require restatement of prior year
        amounts.



<TABLE>
<CAPTION>

(IN THOUSANDS, EXCEPT SHARE DATA)
                                                            QUARTER ENDED SEPTEMBER 30,         NINE MONTHS ENDED SEPTMEBER 30,
                                                        ----------------------------------   ------------------------------------
                                                                                   PERCENT                                PERCENT
FINANCIAL HIGHLIGHTS                                      1998         1997         CHANGE     1998          1997          CHANGE
------------------------------------------------------------------------------------------   ------------------------------------
<S>                                                     <C>          <C>            <C>      <C>           <C>            <C>
Net revenues, including security gains............      $45,652      $39,203         16.5%   $132,660      $116,528         13.8%
Net interest income - FTE.........................       33,956       30,434         11.6%     99,084        89,439         10.8%
Operating expenses................................       28,677       24,369         17.7%     84,018        75,142         11.8%
Net income from operations........................       10,878        9,047         20.2%     31,520        25,762         22.4%
Net income........................................       10,878        9,047         20.2%     28,213        19,318         46.0%
Basic earnings per share from operations..........         0.37         0.34          8.8%       1.11          0.96         15.6%
Basic earnings per share..........................         0.37         0.34          8.8%       0.99          0.72         37.5%
Diluted earnings per share from operations........         0.37         0.33         12.1%       1.09          0.94         16.0%
Diluted earnings per share........................         0.37         0.33         12.1%       0.98          0.71         38.0%
Cash dividends per share..........................         0.14         0.12         16.7%       0.40          0.33         21.2%
Book value per share..............................        11.23        10.43          7.7%


                                                           TRAILING TWELVE MONTHS ENDED
                                                                    SEPTEMBER 30,
                                                      -------------------------------------
                                                                                   PERCENT
FINANCIAL HIGHLIGHTS                                      1998         1997         CHANGE
-------------------------------------------------------------------------------------------
Net revenues, including security gains............      $175,940     $154,388        14.0%
Net interest income - FTE.........................       130,434      118,952         9.7%
Operating expenses................................       115,116       99,805        15.3%
Net income from operations........................        40,866       34,655        17.9%
Net income........................................        37,559       28,211        33.1%
Basic earnings per share from operations..........          1.46         1.30        12.3%
Basic earnings per share..........................          1.34         1.06        26.4%
Diluted earnings per share from operations........          1.43         1.27        12.6%
Diluted earnings per share........................          1.32         1.04        26.9%
Cash dividends per share..........................          0.52         0.44        18.2%
Book value per share..............................


                                                            QUARTER ENDED SEPTEMBER 30,         NINE MONTHS ENDED SEPTEMBER 30,
                                                        ----------------------------------   ------------------------------------
                                                                                   PERCENT                                PERCENT
KEY FINANCIAL RATIOS (A)                                  1998          1997        CHANGE     1998          1997          CHANGE
------------------------------------------------------------------------------------------   ------------------------------------
   Return on average assets.......................        1.06%         0.99%        0.07%       1.07%         1.00%        0.07%
   Return on average equity.......................       13.44%        13.16%        0.28%      13.59%        13.06%        0.53%
   Net interest margin (FTE)......................        3.52%         3.52%        0.00%       3.52%         3.62%       -0.10%
   Core interest margin (FTE).....................        4.18%         4.17%        0.01%       4.21%         4.22%       -0.01%
   Efficiency Ratio (FTE) ........................       59.47%        58.59%        0.88%      59.93%        60.93%       -1.00%

(A) All 1998 ratios have been adjusted to exclude merger-related charges recorded in the first quarter.


INCOME STATEMENT
------------------------------------------------------------------------------------------   ------------------------------------
Interest income...................................      $74,979      $67,708         10.7%   $217,814      $191,747         13.6%
Interest expense..................................       43,593       39,666          9.9%    126,257       109,115         15.7%
                                                        ----------------------------------   ------------------------------------
   Net interest income............................       31,386       28,042         11.9%     91,557        82,632         10.8%
Provision for loan losses.........................        2,226        2,673        -16.7%      6,013         6,274         -4.2%
Non-interest income:
   Trust and asset management income..............        6,280        3,854         62.9%     17,534        11,575         51.5%
   Service charges on deposits....................        2,447        2,011         21.7%      6,496         5,942          9.3%
   Mortgage revenues..............................        2,233        1,762         26.7%      7,308         4,040         80.9%
   Insurance revenues.............................          620          364         70.3%      1,504         1,164         29.2%
   Other..........................................        2,109        2,596        -18.8%      6,601         9,587        -31.1%
                                                        ----------------------------------   ------------------------------------
      Total non-interest income...................       13,689       10,587         29.3%     39,443        32,308         22.1%
Net security gains................................          577          574          0.5%      1,660         1,588          4.5%
Operating expenses:
   Personnel costs................................       16,322       14,218         14.8%     48,098        43,164         11.4%
   Net occupancy expense..........................        1,736        1,634          6.2%      5,093         4,946          3.0%
   Equipment expense..............................        2,019        1,822         10.8%      5,818         5,963         -2.4%
   Professional fees..............................        1,243          699         77.8%      2,878         2,546         13.0%
   Advertising and business development...........          849          491         72.9%      2,643         2,539          4.1%
   Amortization of intangible assets..............          649          560         15.9%      1,920         1,659         15.7%
   Other..........................................        5,859        4,945         18.5%     17,568        14,325         22.6%
                                                        ----------------------------------   ------------------------------------
      Total operating expenses....................       28,677       24,369         17.7%     84,018        75,142         11.8%
                                                        ----------------------------------   ------------------------------------
Income before income taxes........................       14,749       12,161         21.3%     42,629        35,112         21.4%
Income taxes......................................        3,871        3,114         24.3%     11,109         9,350         18.8%
                                                        ----------------------------------   ------------------------------------
NET INCOME FROM OPERATIONS........................      $10,878      $ 9,047         20.2%   $ 31,520      $ 25,762         22.4%
   Merger related charges, net of tax ............            0            0           N/M      3,307         3,845           N/M
   Information systems charge, net of tax ........            0            0           N/M          0         2,599           N/M
                                                        ----------------------------------   ------------------------------------
NET INCOME........................................      $10,878      $ 9,047         20.2%   $ 28,213      $ 19,318         46.0%
                                                        ==================================   ====================================


Average shares outstanding - basic (000)..........       29,028       26,882          8.0%     28,398        26,836          5.8%
Average shares outstanding - diluted (000)........       29,560       27,503          7.5%     28,930        27,389          5.6%
Ending shares outstanding (000)...................       29,020       26,908          7.8%
</TABLE>

<PAGE>

AMCORE FINANCIAL, INC.

<TABLE>
<CAPTION>
                                                                         QUARTER ENDED SEPTEMBER 30,
                                                               ----------------------------------------------
(in thousands)                                                         1998                     1997
-----------------------------------------------------------    ----------------------------------------------
                                                  ENDING         AVERAGE      YIELD/      AVERAGE      YIELD/
                                                  BALANCE        BALANCE       RATE       BALANCE       RATE
-----------------------------------------------------------    ----------------------------------------------
<S>                                             <C>            <C>            <C>       <C>            <C>
ASSETS:
   Taxable securities.........................  $1,036,508     $1,146,254     6.77%     $1,204,672     6.85%
   Tax-exempt securities (FTE)................     371,453        349,523     7.83%        308,275     8.49%
   Other earning assets.......................      15,756         22,993     4.99%          9,633     4.07%
   Loans held for sale........................      35,262         25,892     6.15%         13,538     7.03%
   Loans, net of unearned income (FTE)........   2,332,510      2,291,383     8.67%      1,897,633     8.89%
                                                -----------    ---------------------------------------------
      Total Earning Assets (FTE)..............  $3,791,489     $3,836,045     8.02%     $3,433,751     8.14%
      Intangible assets.......................      18,045         18,353                   13,195
      Other non-earning assets................     229,142        200,387                  185,771
                                                -----------    ---------------------------------------------
      TOTAL ASSETS............................  $4,038,676     $4,054,785               $3,632,717
                                                ===========    =============================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
   Interest bearing deposits..................  $2,474,356     $2,462,550     4.89%     $2,135,868     4.90%
   Non-interest bearing deposits..............     326,766        318,143                  285,716
                                                -----------    ---------------------------------------------
      Total Deposits..........................  $2,801,122     $2,780,693               $2,421,584
                                                -----------    ---------------------------------------------
   Short-term borrowings......................     541,186        592,642     5.66%        755,351     5.78%
   Long-term borrowings.......................     315,620        307,038     6.04%        139,420     7.35%
                                                -----------    ---------------------------------------------
      Total Interest Bearing Liabilities......   3,331,162      3,362,230     5.13%      3,030,639     5.23%
      Other liabilities.......................      54,772         53,388                   43,541
                                                -----------    ---------------------------------------------
      Total Liabilities.......................  $3,712,700     $3,733,761               $3,359,896
      Stockholders' Equity....................     325,976        321,024                  272,821
                                                -----------    ---------------------------------------------
      TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY....................  $4,038,676     $4,054,785               $3,632,717
                                                ===========    =============================================

                                                         NINE MONTHS ENDED SEPTEMBER 30,
                                                 ----------------------------------------------
(in thousands)                                           1998                     1997
------------------------------------------------ ----------------------------------------------
                                                   AVERAGE      YIELD/      AVERAGE      YIELD/
                                                   BALANCE       RATE       BALANCE       RATE
------------------------------------------------ ----------------------------------------------
<S>                                              <C>            <C>       <C>            <C>
ASSETS:
   Taxable securities.........................   $1,182,795     6.79%     $1,122,400     6.69%
   Tax-exempt securities (FTE)................      340,649     7.94%        284,412     8.69%
   Other earning assets.......................       14,257     5.28%         11,217     5.24%
   Loans held for sale........................       27,470     5.22%         11,125     7.02%
   Loans, net of unearned income (FTE)........    2,158,692     8.75%      1,843,032     8.80%
                                                 ---------------------------------------------
      Total Earning Assets (FTE)..............   $3,723,863     8.04%     $3,272,186     8.07%
      Intangible assets.......................       17,571                   13,313
      Other non-earning assets................      200,728                  175,353
                                                 ---------------------------------------------
      TOTAL ASSETS............................   $3,942,162               $3,460,852
                                                 =============================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
   Interest bearing deposits..................   $2,361,681     4.92%     $2,074,682     4.77%
   Non-interest bearing deposits..............      319,958                  291,190
                                                 ---------------------------------------------
      Total Deposits..........................   $2,681,639               $2,365,872
                                                 ---------------------------------------------
   Short-term borrowings......................      637,758     5.70%        658,692     5.70%
   Long-term borrowings.......................      259,956     6.12%        131,704     6.78%
                                                 ---------------------------------------------
      Total Interest Bearing Liabilities......    3,259,395     5.17%      2,865,078     5.08%
      Other liabilities.......................       52,754                   40,805
                                                 ---------------------------------------------
      Total Liabilities.......................   $3,632,107               $3,197,073
      Stockholders' Equity....................      310,055                  263,779
                                                 ---------------------------------------------
      TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY....................   $3,942,162               $3,460,852
                                                 =============================================
</TABLE>

<TABLE>
<CAPTION>
                                                ----------------------------------------------------------------
                                                                          QUARTER ENDED
                                                ----------------------------------------------------------------
                                               SEPTEMBER 30, SEPTEMBER 30,   PERCENT     DECEMBER 31,    PERCENT
ASSET QUALITY (IN THOUSANDS)                       1998          1997         CHANGE         1997         CHANGE
----------------------------------------------------------------------------------------------------------------
<S>                                                <C>          <C>            <C>          <C>           <C>
Ending allowance for loan losses.............      $25,935      $21,415         21.1%       $19,908        30.3%
Net charge-offs..............................          879        1,431        -38.6%         2,030       -56.7%
Net charge-offs to average loans (B).........         0.15%        0.30%       -0.15%          0.42%       -0.3%

Non-performing assets:
   Nonaccrual................................      $19,273      $18,903          2.0%       $19,491        -1.1%
   Restructured..............................            0          418          N/M            377         N/M
                                                ----------------------------------------------------------------
      Non-performing loans...................       19,273       19,321         -0.2%        19,868        -3.0%
   Other real estate owned (OREO)............        1,727        1,422         21.4%         1,668         3.5%
                                                ----------------------------------------------------------------
      Total non-performing assets............      $21,000      $20,743          1.2%       $21,536         2.5%
                                                ----------------------------------------------------------------

Loans 90 days past due and still accruing....      $ 5,123       $4,457         14.9%        $3,386        51.3%



                                                ----------------------------------
                                                  NINE MONTHS ENDED SEPTEMBER 30,
                                                ----------------------------------
                                                                         PERCENT
ASSET QUALITY (IN THOUSANDS)                        1998      1997       CHANGE
----------------------------------------------  ----------------------------------
Ending allowance for loan losses.............
Net charge-offs..............................      2,123      4,404        -51.6%
Net charge-offs to average loans (B).........       0.13%      0.32%        -0.2%


(B) On an annualized basis.

KEY ASSET QUALITY RATIOS
----------------------------------------------------------------------------------------------------------------
   Allowance to ending loans.................         1.11%        1.12%       -0.01%          1.01%       0.10%
   Allowance to non-performing loans...........     134.57%      110.84%       23.73%        100.20%      34.37%
   Non-performing loans to loans.............         0.83%        1.01%       -0.18%          1.01%      -0.18%
   Non-performing assets to loans & OREO.......       0.90%        1.09%       -0.19%          1.10%      -0.20%
   Non-performing assets to total assets......        0.52%        0.56%       -0.04%          0.59%      -0.07%

CAPITAL ADEQUACY
----------------------------------------------------------------------------------------------------------------
  Total risk-based capital...................        13.98%       14.58%        0.60%         14.38%      -0.40%
  Tier 1 risk-based capital..................        12.98%       13.61%       -0.63%         13.50%      -0.52%
  Leverage ratio.............................         8.42%        8.28%        0.14%          8.31%      -0.11%
   Non-performing assets to total assets......

</TABLE>
<PAGE>

                                                        NEWS RELEASE


    Date:    Oct. 21, 1998


    Contact: Katherine Taylor
             Investor Relations Manager
             815-961-7164
                                                               AMCORE
                                                               FINANCIAL, INC.


           AMCORE FINANCIAL, INC., ANNOUNCES STOCK REPURCHASE PROGRAM

    ROCKFORD -- AMCORE Financial, Inc., announced today that the executive
committee of its Board of Directors has authorized the repurchase of up to five
percent of its common stock, or 1.4 million shares.

    The transactions will be completed from time to time, depending on market
conditions, through open market or privately negotiated purchases. AMCORE
currently has 29.019 million shares of common stock outstanding.

    The repurchased shares will become treasury shares and will be used for
general corporate purposes, including the issuance of shares in connection with
AMCORE's stock option plans and other employee benefit plans.

    Robert J. Meuleman, president and chief executive officer of AMCORE, said,
"We believe the repurchase of our own shares will enable us to take advantage of
an attractive investment opportunity given the current price level of our stock.
We feel this investment will be of benefit to both the company and its
stockholders and that this program demonstrates AMCORE's commitment to
shareholder value."

    AMCORE Financial, Inc., headquartered in northern Illinois, is a financial
services company with banking assets of $4 billion and 11 banks operating in 68
locations in Illinois and Wisconsin. The company also has four financial
services companies: AMCORE Investment Group, which provides trust and brokerage
services, and through its wholly owned subsidiary, Investors Management Group,
provides capital management and mutual fund administrative services, and is the
investment advisor for the Vintage family of mutual funds; AMCORE Mortgage,
Inc.; AMCORE Consumer Finance Company, Inc. and AMCORE Insurance Group, Inc.

AMCORE common stock is listed on The NASDAQ Stock Market under the symbol
"AMFI." Further information about AMCORE Financial Inc. can be found at our
website at http://www.AMCORE.com.





AMCORE Financial, Inc.
501 Seventh Street, Post Office Box 1537, Rockford, Illinois 61110-0037
Telephone 815 968-2241